MDU Resources Reports First Quarter 2026 Results; Progress on Proposed Bakken East Pipeline
MDU
Published on 05/07/2026 at 08:31 am EDT
BISMARCK, N.D., May 7, 2026 /PRNewswire/ -- MDU Resources Group, Inc. (NYSE: MDU) today announced its financial results for the first quarter of 2026, highlighting continued execution across its segments, despite milder weather, as well as positive outcomes from recent capital investments and meaningful progress on its proposed Bakken East Pipeline Project.
During the quarter, a successful binding open season for the proposed Bakken East Pipeline Project concluded with approximately 1.4 billion cubic feet per day of submitted interest. Of that total, approximately 40% has been signed under precedent agreements with additional precedent agreements in active negotiation. Based on submitted interest, we are now projecting total capital investment for the potential project in the range of $2.7 billion to $3.2 billion, which would be incremental to our current $3.1 billion capital investment forecast. The company has not reached a final investment decision on this project and will continue to finalize precedent agreement negotiations before proceeding with a decision. As we look to finance a project of this size and scope, we will evaluate all options including using our balance sheet, pursuing potential partnerships and various other options. We will continue to provide updates on this potential project as details develop.
Recent investments, including Badger Wind Farm and the Minot Expansion Project, are delivering financial benefits and supporting customer demand, while emerging opportunities tied to data center growth across our service territory reinforces the long-term value of the company's infrastructure portfolio.
"We delivered a strong first quarter when accounting for the impact of warmer weather across our service territory," said Nicole A. Kivisto, president and CEO of MDU Resources. "Milder conditions reduced volumes, and normalization mechanisms in several of our states helped offset those impacts, demonstrating the strength of our regulated businesses. At the same time, rate relief as well as recent investments such as Badger Wind Farm and our pipeline expansions contributed positive results. Additionally, we continue to see encouraging demand trends, including continued interest from data center development and strong interest in our proposed Bakken East Pipeline Project."
The following summarizes the company's first quarter results for the three months ended March 31:
2026
2025
Net income (in millions)
$ 80.8
$ 82.0
Earnings per share, diluted
$ .39
$ .40
"Our ability to deliver consistent results in a dynamic energy environment speaks to the strength and operational discipline of our teams," Kivisto added. "Our employees remain focused on safety, reliability and cost-effectiveness, enabling us to deliver long-term value to our customers and stockholders."
Electric Utility SegmentBenefits from Badger Wind Farm recovery, more than offset by impacts from milder weather
The electric segment earned $14.5 million in the first quarter of 2026, compared with $15.0 million in the first quarter of 2025. Badger Wind Farm was placed in service Dec. 31, 2025, and this marked the first full quarter of benefits from the investment, driving higher retail revenues and recovery. These benefits were more than offset by milder weather, which drove lower retail sales volumes of approximately $2 million.
Regulatory Update:
Natural Gas Distribution SegmentLower volumes largely offset by weather normalization mechanisms and rate relief
The natural gas distribution segment earned $44.2 million in the first quarter of 2026, compared with $44.7 million in the first quarter of 2025. Results reflect lower volumes driven by warmer weather, approximately a $5 million impact, due to 10%-30% warmer temperatures across our service territory compared to last year, including temperatures 20% higher in Idaho and 30% higher in Montana. Weather normalization mechanisms in certain states helped offset the warmer temperatures. Additionally, the lower volumes were largely offset by rate relief in Washington, Idaho, Montana and Wyoming.
Regulatory Update:
Pipeline SegmentLower storage-related revenue partially offset by contributions from recent expansion projects placed in service
The pipeline segment earned $15.3 million in the first quarter of 2026, compared to a record $17.2 million in the first quarter of 2025. Results were impacted by lower interruptible natural gas storage withdrawals, along with higher operation and maintenance expense primarily due to increased material costs and payroll-related expenses. Higher Montana property tax accruals also contributed to the year-over-year decrease.
These impacts were partially offset by continued strong customer demand for short-term natural gas transportation contracts as well as contributions from a growth project recently placed in service.
Pipeline Segment Strategic Projects Updates:
Equity and Funding PlanIn connection with the company's December 2025, follow-on public offering, a portion of the related forward sale agreements were settled on March 13, 2026, resulting in the issuance of 4.3 million shares of new common stock for proceeds of $81.3 million. The company had previously stated it expects to issue between $150 million to $175 million of equity in 2026, and between $100 million to $125 million in 2027, to support near-term capital expenditures for growth.
GuidanceFor 2026, MDU Resources expects earnings per share to be in the range of $0.93 to $1.00.
The expected 2026 results are based on these assumptions:
The company's long-term EPS guidance remains unchanged with an expected growth rate of 6%–8%.
Conference CallMDU Resources will webcast its first quarter 2026 earnings conference call today at 2 p.m. ET. The webcast can be accessed at www.mdu.com under the "Investors" heading. Select "Events & Presentations," and click on "Q1 2026 Earnings Conference Call." After the webcast, a replay will be available at the same location.
About MDU Resources Group, Inc.MDU Resources Group, Inc., a member of the S&P SmallCap 600 index, delivers safe, reliable, cost-effective and environmentally responsible electric utility and natural gas distribution services to more than 1.2 million customers across the Pacific Northwest and Midwest. In addition to its utility operations, the company's pipeline business operates a more than 3,800-mile natural gas pipeline network and storage system, ensuring reliable energy delivery across the Northern Plains. With a legacy spanning over a century, MDU Resources remains focused on energizing lives for a better tomorrow. For more information about MDU Resources, visit www.mdu.com or contact the investor relations department at [email protected].
Investor Contact: Brent Miller, treasurer, 701-530-1730Media Contact: Byron Pfordte, director of integrated communications, 208-377-6050
Cautionary Note Regarding Forward-Looking StatementsThis news release contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events or developments that the company anticipates will or may occur in the future are based on underlying assumptions (many of which are based, in turn, upon further assumptions), including but not limited to, statements identified by the words "anticipates," "estimates," "expects," "intends," "plans," and "predicts," in each case related to such things as growth estimates, stockholder value creation, the company's "CORE" strategy, capital expenditures, financial guidance, trends, objectives, goals, dividend payout ratio targets, earnings per share growth targets, customer rates, regulatory approvals, sustainability, strategies and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the company's filings with the U.S. Securities and Exchange Commission.
While made in good faith, these forward-looking statements are based largely on the company's expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond the company's control. For additional discussion regarding risks and uncertainties that may affect forward-looking statements, see "Risk Factors" disclosed in the company's most recent Annual Report on Form 10-K, and subsequent filings. Any changes in such assumptions or factors could produce significantly different results. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by applicable law, the company undertakes no obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise.
Consolidated Statements of Income
Three Months Ended
March 31,
2026
2025
(In millions, except per share amounts)
(Unaudited)
Operating revenues
$ 606.0
$ 674.8
Operating expenses:
Purchased natural gas sold
239.4
317.2
Electric fuel and purchased power
46.1
43.7
Operation and maintenance
114.8
111.1
Depreciation and amortization
54.2
51.3
Taxes, other than income
35.8
38.7
Total operating expenses
490.3
562.0
Operating income
115.7
112.8
Other income (expense)
2.6
5.0
Interest expense
32.7
26.8
Income before income taxes
85.6
91.0
Income tax expense
4.7
8.5
Income from continuing operations
80.9
82.5
Discontinued operations, net of tax
(.1)
(.5)
Net income
$ 80.8
$ 82.0
Earnings per share – basic:
Income from continuing operations
$ .39
$ .40
Discontinued operations, net of tax
—
—
Earnings per share – basic
$ .39
$ .40
Earnings per share – diluted:
Income from continuing operations
$ .39
$ .40
Discontinued operations, net of tax
—
—
Earnings per share – diluted
$ .39
$ .40
Weighted average common shares outstanding – basic
205.4
204.1
Weighted average common shares outstanding – diluted
207.0
205.0
Selected Cash Flows Information
Three Months Ended
March 31,
2026
2025
(In millions)
Net cash provided by operating activities
$ 149.2
$ 217.5
Net cash used in investing activities
(91.2)
(94.8)
Net cash used in financing activities
(32.9)
(130.1)
Increase (decrease) in cash, cash equivalents and restricted cash
25.1
(7.4)
Cash, cash equivalents and restricted cash - beginning of year
28.2
66.9
Cash, cash equivalents and restricted cash - end of period
$ 53.3
$ 59.5
Capital Expenditures
Business Line
2026 Estimated
2027 Estimated
2028 Estimated
2029Estimated
2030 Estimated
2026-2030Total Estimated
(In millions)
Electric
$ 144
$ 309
$ 250
$ 184
$ 210
$ 1,097
Natural gas distribution
361
295
240
254
223
1,373
Pipeline
60
70
181
282
50
643
Total capital expenditures1
$ 565
$ 674
$ 671
$ 720
$ 483
$ 3,113
1 Excludes Other category
Note: Total capital expenditures is presented on a net basis
The capital program is subject to continued review and modification by the company. Actual expenditures may vary from estimates. Investment in the potential Bakken East Pipeline project would be incremental to the outlined capital program.
Electric
Three Months Ended
March 31,
2026
2025
Variance
(In millions)
Operating revenues1,2
$ 121.2
$ 112.4
7.8 %
Operating expenses:
Electric fuel and purchased power1
46.1
43.7
5.5 %
Operation and maintenance
28.9
28.6
1.0 %
Depreciation and amortization
19.6
17.2
14.0 %
Taxes, other than income
5.5
4.8
14.6 %
Total operating expenses
100.1
94.3
6.2 %
Operating income
21.1
18.1
16.6 %
Other income
.4
1.0
(60.0) %
Interest expense
11.9
7.9
50.6 %
Income before income taxes
9.6
11.2
(14.3) %
Income tax benefit2
(4.9)
(3.8)
28.9 %
Net income
$ 14.5
$ 15.0
(3.3) %
Operating Statistics
Three Months Ended
March 31,
2026
2025
Revenues (millions)1,2
Retail sales:
Residential
$ 39.1
$ 38.2
Commercial3
46.9
45.2
Industrial
9.9
8.8
Other
2.0
1.7
97.9
93.9
Other
23.3
18.5
$ 121.2
$ 112.4
Volumes (million kWh)
Retail sales:
Residential
332.0
370.7
Commercial3
741.9
723.9
Industrial
120.7
116.7
Other
19.2
20.2
1,213.8
1,231.5
Average cost of electric fuel and purchased power per kWh
$ .028
$ .027
The previous tables reflect items that are passed through to customers resulting in minimal impact to earnings. These items include:
1 Electric fuel and purchased power costs, which impact both operating revenues and electric fuel and purchased power expense
2 Production tax credits, which impact income tax benefit and operating revenues
3 Commercial includes the impact from data centers
The electric business reported net income of $14.5 million in the first quarter of 2026, compared to $15.0 million for the same period in 2025. This decrease was largely the result of higher interest expense associated with debt issuances for recent capital investments including Badger Wind Farm. Lower retail sales volumes due to warmer weather and higher depreciation expense, primarily Badger Wind Farm, further drove the decrease. Higher retail revenues, primarily from recovery mechanisms associated with renewable investments including Badger Wind Farm, largely offset the decrease.
Natural Gas Distribution
Three Months Ended
March 31,
2026
2025
Variance
(In millions)
Operating revenues1,2,3
$ 462.5
$ 539.3
(14.2) %
Operating expenses:
Purchased natural gas sold1
273.8
350.5
(21.9) %
Operation and maintenance2
65.2
63.6
2.5 %
Depreciation and amortization
26.4
26.1
1.1 %
Taxes, other than income3
26.5
30.6
(13.4) %
Total operating expenses
391.9
470.8
(16.8) %
Operating income
70.6
68.5
3.1 %
Other income
2.3
3.3
(30.3) %
Interest expense
16.3
14.8
10.1 %
Income before income taxes
56.6
57.0
(0.7) %
Income tax expense
12.4
12.3
0.8 %
Net income
$ 44.2
$ 44.7
(1.1) %
Operating Statistics
Three Months Ended
March 31,
2026
2025
Revenues (millions)1,2,3
Retail Sales:
Residential
$ 259.5
$ 291.6
Commercial
150.2
189.6
Industrial
13.4
15.7
423.1
496.9
Transportation and other
39.4
42.4
$ 462.5
$ 539.3
Volumes (MMdk)
Retail sales:
Residential
26.5
31.8
Commercial
18.6
21.9
Industrial
1.5
1.7
46.6
55.4
Transportation sales:
Commercial
.6
.8
Industrial
38.9
48.4
39.5
49.2
Total throughput
86.1
104.6
Average cost of natural gas per dk
$ 5.87
$ 6.33
The previous tables reflect items that are passed through to customers resulting in minimal impact to earnings. These items include:
1 Natural gas costs, which impact operating revenues and purchased natural gas sold.
2 Conservation, which impacts operating revenues and operation and maintenance expense.
3 Revenue-based taxes that impact both operating revenues and taxes, other than income.
The natural gas distribution business reported net income of $44.2 million in the first quarter of 2026, compared to $44.7 million for the same period in 2025. The decrease was largely the result of lower retail sales volumes due to warmer weather. Lower electric generation transportation volumes driven by warmer weather, higher operation and maintenance expense, primarily payroll-related expense and contract services, and higher interest expense further drove the decrease. The decrease was largely offset by higher retail sales revenue due to rate relief in Washington, Idaho, Montana and Wyoming.
Pipeline
Three Months Ended
March 31,
2026
2025
Variance
(In millions)
Operating revenues
$ 57.1
$ 56.7
.7 %
Operating expenses:
Operation and maintenance
20.8
19.3
7.8 %
Depreciation and amortization
8.2
8.0
2.5 %
Taxes, other than income
3.8
3.3
15.2 %
Total operating expenses
32.8
30.6
7.2 %
Operating income
24.3
26.1
(6.9) %
Other income (expense)
(.3)
.4
(175.0) %
Interest expense
4.0
4.2
(4.8) %
Income before income taxes
20.0
22.3
(10.3) %
Income tax expense
4.7
5.1
(7.8) %
Net income
$ 15.3
$ 17.2
(11.0) %
Operating Statistics
Three Months Ended
March 31,
2026
2025
Transportation volumes (MMdk)
143.2
143.5
Customer natural gas storage balance (MMdk):
Beginning of period
37.6
44.1
Net withdrawal
(10.3)
(22.0)
End of period
27.3
22.1
The pipeline business reported net income of $15.3 million in the first quarter of 2026, compared to $17.2 million for the same period in 2025. The earnings decrease was driven by lower interruptible natural gas storage withdrawals. Higher operation and maintenance expense primarily attributable to higher materials and payroll-related costs also contributed, as well as higher Montana property tax accruals. The decrease was partially offset by continued strong customer demand for short-term natural gas transportation contracts, as well as impacts from a growth project placed in service in 2025 and a contracted volume increase associated with a previously constructed growth project.
Other
Three Months Ended
March 31,
2026
2025
Variance
(In millions)
Operating revenues
$ .2
$ .2
— %
Operating expenses:
Operation and maintenance
.5
.1
400.0 %
Total operating expenses
.5
.1
400.0 %
Operating income (loss)
(.3)
.1
(400.0) %
Other income
1.1
1.4
(21.4) %
Interest expense
1.4
1.0
40.0 %
Income (loss) before income taxes
(.6)
.5
(220.0) %
Income tax benefit
(7.5)
(5.1)
47.1 %
Income from continuing operations
6.9
5.6
23.2 %
Discontinued operations, net of tax
(.1)
(.5)
(80.0) %
Net income
$ 6.8
$ 5.1
33.3 %
For the first quarter of 2026 Other reported net income of $6.8 million compared to net income of $5.1 million for the same period in 2025. The increase was primarily due to income tax adjustments related to the company's annualized estimated tax rate. Partially offsetting the increase was higher operation and maintenance expense.
Other includes the activities of the captive insurer which insures various types of risks of the company's subsidiaries. Also included in Other is general and administrative costs and interest expense previously allocated to the company's former businesses that did not meet the criteria for discontinued operations. Discontinued operations includes certain costs associated with legacy business activities.
Other Financial Data
March 31,
2026
2025
(In millions, except per share amounts)
(Unaudited)
Book value per common share
$ 13.89
$ 13.42
Market price per common share
$ 20.72
$ 16.91
Market value as a percent of book value
149.2 %
126.0 %
Total assets
$ 7,684
$ 6,961
Total equity
$ 2,904
$ 2,743
Total debt
$ 2,596
$ 2,194
Capitalization ratios:
Total equity
52.8 %
55.6 %
Total debt
47.2 %
44.4 %
100.0 %
100.0 %
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SOURCE MDU Resources Group, Inc.